How Coeur Mining won best proxy statement (small cap)

Jan 30, 2020
Coeur Mining took home the trophy at the Corporate Governance Awards 2019

As a small-cap company, Coeur Mining doesn’t have the same resources that many past winners and nominees of the best proxy statement award have had. But this year, for the first time, the Corporate Governance Awards recognize the best proxy statement among small caps, rather than grouping their entries with mid-cap ones.

While the legal team at Coeur Mining may have a small budget and fewer resources than some companies, it has looked at the trends adopted by the large-cap leaders in proxy disclosure and thought carefully about what it could emulate. Back in 2015 the company’s proxy statement was very dry: it clocked in at more than 100 pages, featured very little visual stimulus and was written like a legal document.

In a short space of the time, the company’s legal team has made significant improvements. This year, for instance, the company focused on how to disclose more about ESG factors. In the opening letter to shareholders, signed by Mitchell Krebs, the company’s president and CEO, the very first point is about how the company has signed up to comply with 10 of the UN’s Sustainable Development Goals. The opening letter goes on to discuss how the company has invested in retaining and rewarding its staff, as well as discussing recent business performance. In a clear illustration of Coeur Mining’s legal team taking inspiration from other proxy statements, the opening letter articulates the theme for this year’s proxy: ‘We pursue a higher standard’.

The opening letter also outlines a unique effort to drive shareholder participation in the proxy voting process. Krebs explains that for every shareholder that casts a vote, $1 will be donated to Hire Heroes USA, a non-profit that supports unemployed and underemployed veterans who are seeking work.

One of the ways the company reinforces the theme of the proxy statement is through the inclusion of a proxy summary – and, again, this is something the legal team had recognized as a best practice in proxy statements at larger companies. The nine-page proxy summary clearly outlines the different sections of the proxy, includes page numbers for easy navigation, and has charts and graphs for easy reading.

Continuing the motif of easy reading, Coeur Mining’s CD&A is easy to follow, due – at least in part – to the macroeconomic outline published on its first page. The legal team was keen to highlight the extent to which executive compensation is linked to business performance and strategic goals, and by including the macroeconomic outline it helps steer the reader through. There are also links drawn between business results and the ultimate impact on executive pay. In several instances this is clearly displayed through the charts and tables – perhaps most effectively in the opening to the CD&A, which is broken into two columns: ‘What we do’ and ‘What we do not do’. The company received a 96 percent approval rate during its say-on-pay vote in 2019.

One aspect of board governance that is likely to face greater scrutiny in the coming years is the board refreshment, evaluation and director selection process. Coeur Mining’s proxy statement clearly outlines the director nomination process, as well as providing meaningful disclosure about why two new directors were appointed to the board. In addition, the board composition section of the proxy opens with a chart displaying the variety of skills and experiences the board directors have. This chart diverges from the skills matrix that is commonly included in proxy statements because rather than being a tick-the-box exercise, it explains why each skill or experience is relevant to Coeur Mining’s board and, therefore, its shareholders.

This article originally appeared in the Corporate Governance Yearbook. 

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